To The Moon

$Strategy(MSTR)$ is scheduled to release its financial results for fiscal Q1 2025 on 01 May 2025 after market closes.

We need to understand that while MicroStrategy operates a business intelligence software company, its stock performance and investor focus are overwhelmingly driven by its strategy of acquiring and holding large amounts of Bitcoin.

Revenue: Analysts expect revenue of around $117.5 million. This represents a slight decrease (around -3.5%) compared to the $121.7 million reported in Q1 2024.

Earnings Per Share (EPS): Estimates for EPS vary significantly, highlighting the difficulty in forecasting due to Bitcoin's volatility and accounting treatment.

Some sources (Yahoo Finance, Investopedia, Yahoo/Reuters) point to a consensus loss estimate of around -$3.09 per share. This would actually be an improvement compared to the -$5.62 loss per share in Q1 2024. Other sources (Benzinga, Nasdaq) show a consensus loss estimate closer to -$2.10 per share.

One source (TipRanks) initially cited an expected EPS of $0.11, but this seems less aligned with other recent estimates and might be outdated or using different calculation methods.

The wide range and negative figures often reflect factors like interest expenses on debt used to buy Bitcoin and, historically, impairment charges on Bitcoin holdings (though this might change, see below).

Strategy (MSTR) Last Positive Earnings Call Saw Share Price Gain A Significant 9.51%

Strategy (MSTR) had a positive earnings call on 05 Feb 2025 which saw its share price gain a significant 9.51% since.

The earnings call highlighted significant strategic initiatives, including a rebranding and massive capital raises, alongside a continued focus on Bitcoin and cloud services. Despite challenges in the traditional software business and past impairment charges, the company showed strong growth in new areas and innovative financial strategies.

Strategy (MSTR) Guidance

During the fourth quarter earnings call for fiscal year 2024, Strategy, formerly MicroStrategy, provided extensive guidance on its financial and strategic directions. The company reported a 50% year-over-year increase in subscription billings and a 48% rise in subscription services revenues, marking a strong performance in its cloud transition. Strategy also discussed its significant role as a Bitcoin treasury company, holding 471,107 Bitcoins with a market value of $46 billion as of February 2025. The adoption of FASB's Fair Value Accounting Standard will result in a $12.75 billion increase to its retained earnings in Q1 2025. In capital markets, Strategy raised $18.8 billion through equity offerings and $6.2 billion via convertible notes, achieving a notable presence as the largest issuer of convertible bonds in a decade.

The company has set ambitious targets for 2025, including a 15% BTC Yield and a $10 billion BTC dollar gain, while focusing on issuing fixed-income securities to further its Bitcoin acquisition strategy.

Key Focus Areas for Strategy's Earnings

Bitcoin Holdings Update: This is the primary focus for most investors. As of the last update on March 19, 2025, MicroStrategy held 214,246 bitcoins. MicroStrategy owns 538,200 bitcoins as of April 21, 2025. MicroStrategy states the average purchase price as $66,384.56 USD per bitcoin with a total cost of $33.139 billion USD.

Impact of Bitcoin Price & Accounting: Bitcoin experienced significant volatility but overall gained value during Q1 2025.

I think we will need to look at how much Bitcoin did MSTR acquire in Q1 2025, based on the records.9 transactions was made between 01 Jan 2025 to 31 Mar 2025, total BTC purchased was 81,785 with a total purchase price of $7.7902 billion over 81,785 BTC, which work out for an average price of $95,252.

As investors, I think we need to watch closely as Bitcoin at time of this writing is trading below $95,000.

Crucially, this might be the first quarter MicroStrategy adopts the new FASB accounting rule allowing companies to report crypto assets at fair value. If adopted, this could mean reporting substantial gains on their Bitcoin holdings for the quarter, rather than potential impairment losses under the old rules. This could significantly impact the reported bottom line (EPS).

Strategy announced its rebranding from MicroStrategy, emphasizing simplicity, continuity, and ambition. It also launched a new website and merchandise store, and was included in the NASDAQ 100 Index.

Strategy remains the largest corporate holder of Bitcoin, with 471,107 Bitcoins valued at $46 billion. They adopted FASB’s Fair Value Accounting Standard, leading to a $12.75 billion increase in retained earnings.

Fair Value Accounting: Crucially, starting January 1, 2025, MicroStrategy adopted new accounting rules requiring Bitcoin to be reported at fair value, with changes flowing through net income. This replaces the old model where only impairment losses were typically recognized. Given Bitcoin's price volatility in Q1, the impact on the reported net income/loss will be significant. Early April reports suggested the company had warned of a potential $5.91 billion unrealized loss on its holdings for Q1, though this could be partially offset by tax benefits. The earnings report will provide the official figures under this new standard.

Core Software Business: While secondary, the performance and revenue trends of the underlying business intelligence software segment provide context on the company's operational health apart from its Bitcoin strategy. The expected slight decline in revenue will be noted.

While secondary to the Bitcoin strategy, the performance of the traditional business intelligence software segment will be noted. Revenue is expected to be flat, but analysts will look at the mix between subscription services (which had been growing) and product licenses (which had been declining). This segment provides some operational cash flow.

Subscription services revenues increased by 48% year-over-year, and subscription billings grew by 57%, reflecting successful cloud transition efforts.

Total software revenues decreased by 3% in Q4 and 7% for the full year 2024, reflecting a shift from on-premise to cloud services.

Financing Activities: Updates on debt levels, interest expenses, and any recent financing activities (like convertible note offerings used to purchase more Bitcoin) are important for understanding the company's financial structure.

Raised $18.8 billion through equity and $6.2 billion through convertible notes in 2024. Notably, they were the largest issuer of convertible bonds in a decade.

Bitcoin Strategy & Outlook: Commentary from Executive Chairman Michael Saylor is always highly anticipated. Expect updates on future Bitcoin acquisition plans, financing strategies (including the use of recent equity and debt offerings), and the company's overall vision as a "Bitcoin Treasury Company" or leveraged Bitcoin proxy. They have ambitious long-term capital-raising plans ($42 billion over 3 years) aimed primarily at acquiring more Bitcoin.

Management Commentary (Michael Saylor): Insights from Executive Chairman Michael Saylor are always highly anticipated. Investors will listen for his outlook on Bitcoin, the company's commitment to the strategy, future acquisition plans, and responses to market conditions.

Launched 'Strike' perpetual convertible preferred stock, raising $584 million. Strike offers an 8% fixed coupon and a perpetual conversion option.

Recorded digital asset impairment charges of $1 billion in Q4 and $1.8 billion for the full year, although this will change with the new accounting standards.

Strategy (MSTR) Price Target

Based on 12 analysts from Tiger Brokers app offering 12 month price targets for Strategy in the last 3 months. The average price target is $443.34 with a high forecast of $650.00 and a low forecast of $175.00. The average price target represents a 20.24% change from the last price of $368.71.

MSTR stock has seen a massive surge over the past year (up over 360%), largely mirroring the rally in Bitcoin's price. The stock often trades at a significant premium relative to the underlying value of its Bitcoin holdings, reflecting market sentiment towards its leveraged Bitcoin strategy.

In essence, while traditional metrics like software revenue and operating costs will be reported, the narrative around MicroStrategy's Q1 earnings will revolve almost entirely around Bitcoin: the size of its holdings, the financial impact of price changes (potentially under new accounting rules), and Michael Saylor's strategic vision.

Technical Analysis - Exponential Moving Average (EMA)

MicroStrategy's stock price is heavily correlated with Bitcoin's price movements and often trades at a significant premium or discount to the underlying value of its Bitcoin holdings. Its valuation metrics based on the software business (like Price-to-Sales) are extremely high and generally considered less relevant by the market than its Bitcoin exposure.

If we looked at how MSTR have been trading while BTC make an upside move above the $93,000 mark, we can see that investors momentum are building upwards, with RSI trending towards the overbought region, this is also making the bulls back in control and they have been able to make a daily uptrend last week, and I am expecting this sentiment to continue and see if the bulls can attempt for a daily uptrend continuation.

With the funds inflow to crypto especially Bitcoin coming back, we might see MSTR making a new high this week just before its earnings on 01 May 2025.

Summary

While analysts forecast roughly flat revenue and a narrower loss per share for MicroStrategy's Q1, the main event will be the update on its vast Bitcoin holdings and, for the first time, seeing the full impact of Bitcoin's price movements on the income statement under fair value accounting rules. Michael Saylor's strategic commentary on future Bitcoin accumulation will also be a key focus for investors who view MSTR primarily as a way to gain leveraged exposure to Bitcoin.

I think we might see Bitcoin helping to give a push to Strategy stock price if the earnings came in flat or less than expected.

Appreciate if you could share your thoughts in the comment section whether you think Strategy could manage a flat earnings but gain because of Bitcoin prices trending higher.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.